July 2008 Archives

In a closely followed court proceeding,  a California court today decided that a reporter could not be compelled to disclose his source in an article about a Chinese espionage ring because the reporter’s First Amendment right to protect that source outweighed the government’s need to identify that source.

A May 16, 2006, story by the reporter cited unnamed "senior Justice Department officials" as the sources of information about criminal charges against a Chinese-born employee of a California defense contractor, who was accused of leaking military information to the Chinese government.  The employee was sentenced to 24 years in prison in March after being convicted last year of conspiracy to export sensitive defense information and being an unregistered foreign agent.  

The reporter was quoted after the ruling as follows:

“Today´s hearing shows that First Amendment press freedoms are under assault. Confidential sources are the lifeblood of a free press, independent of government control. Without them, most government failures and abuses of past decades would have gone unreported and uncorrected. The identity of these confidential news sources must be protected if our press freedoms, fundamental to the effective functioning of our democratic system, are to endure. Efforts by government to compel reporters to disclose news sources must be resisted."

The Third Circuit has rightly thrown out the $550,000 fine against CBS for the Janet Jackson “costume malfunction” lasting 9/16^th of a second during the 2004 Super Bowl Halftime show. The Court concluded that the FCC's actions in imposing a fine for a fleeting incident were arbitrary and capricious. In its

          The FCC had relied on a single sentence in a 2001 policy statement to justify the single, isolated event as an “indecent standard.” The FCC had written: "even relatively fleeting references may be found indecent where other factors contribute to a finding of patent offensiveness.” Judge Sirica found that the term "relatively fleeting" is not the same as one isolated incident to trigger indecency fines, adding: "While an agency’s interpretation of its own precedent is entitled to deference,” . . . deference is inappropriate where the agency’s proffered interpretation is capricious. Until its Golden Globes decision in March of 2004, the FCC’s policy was to exempt fleeting or isolated material from the scope of actionable indecency. Because CBS broadcasted the Halftime Show prior to [the introduction of the fleeting expletive standard] this was the policy in effect when the incident with Jackson and Timberlake occurred."

The Court also refused to hold CBS liable for the independent actions of the performers. The FCC had argued that CBS was vicariously liable under the doctrine of respondeat superior,. The Court would have none of it, holding: "CBS’s actual control over the Halftime Show performances did not extend to all aspects of the performers’ work. The performers, not CBS, provided their own choreography and retained substantial latitude to develop the visual performances that would accompany their songs. . . . [and] but the performers retained discretion to make those choices in the first instance. .  "

Alan Milstein

In a startling reversal of his own ruling, Chief Judge David Hamilton of the Southern District of Indiana issued a 28 page

The Judge rightly concluded that "drug manufacturers
have the authority to strengthen warnings without the advance permission of
the FDA"  and that “failure to warn litigation can serve to reinforce the FDA's
regulations, which already place the obligation to strengthen the warnings
on a drug's label squarely on the shoulders of the drug's manufacturer."
          The Judge relied in part on a recent law review article by former FDA Commissioner, David Kessler, in which he noted the recent change in position by the FDA under the watch of a Chief counsel with significant ties to BigPharma. Mr. Kessler wrote: "The most fundamental problem is that drugs are approved on the basis of
clinical testing that cannot, and is not designed to, uncover risks that are
relatively rare or have long latency periods. Legislation cannot solve this
problem ... Top-down surveillance is no substitute for failure to warn
litigation, which provides the FDA, doctors, and patients with information
about new risks that is otherwise unavailable to the agency."
              The Indiana case involved a 55 year-old Catholic priest with no history of suicidal ideation who took his life 22 days after being put on Paxil.

Alan Milstein

The connection between Mirapex and compulsive gambling first came to light in July 2005 when doctors at the Mayo Clinic reported the results of a study suggesting a link between dopamine agonist drugs like Mirapex and compulsive gambling.

Researchers have long known that certain drugs can cause adverse reactions that can change a person's behavior by initiating destructive thoughts which lead to destructive behavior. It will be interesting to see if a court and jury will accept the theory that a prescription drug is responsible for behavior such as a gambling addiction.

Alan Milstein

The United States Court of Appeals for the Ninth Circuit affirmed the conviction of an individual concluding and affirming the conclusion that documents the individual presented to the Internal Revenue Service were unlawful fictitious financial instruments.

In these economic times as reported and made a reality by our media, there is typically an onslaught of economic crime perpetrated by individuals desperate to escape their personal economic turmoil. Apparently, this taxpayer on two separate occasions submitted a document he titled a “sight draft” and a tax payment voucher for the amount of the draft to the IRS.   A sight draft is a valid instrument used in international trade. The document looks like a check, often requires no signature and is payable upon demand or presentment, hence the “on sight”.

The sight draft fraud is common amongst tax protestors and particularly tax protestor “redemptionists”.  You will like this one.  Redemptionists believe that the national debt is collateralized pro rata by each individual’s birth certificate and that each person has a mirror entity, a straw man, that represents the amount of work you do.  Redemptionists say there is a way to redeem your straw man and stake your claim to the debt.  As it goes, all you need to do is file your birth certificate along with the sight draft and you have redeemed your straw man and, I guess, released your collateralization of the national debt.  Thereafter you control your straw man and you can use the money from the sight draft to pay your mortgage or taxes.  Don’t try this at home.

Here

          The hearings were held behind closed doors despite the attempts by Landis and others to hold them where the media and the public could attend.

          Landis, whose endurance has always served him well, responded: "They will never get to the end of how much I can take. I'm not happy that I'm the person who has to take this, but I would never allow myself to be treated this way and ever give up."

Alan Milstein

Representative  Henry Waxman has introduced  a bill to essentially overrule the recent court rulings such as Riegel v Medtronic holding that civil claims against medical device manufacturers are pre-empted by FDA action.  The Medical Device Safety Act of 2008 would reinstate tort liability in state civil actions alleging negligent design of such devices or the failure to warn of their dangerous propensity. Such a bill would be a welcome relief to consumers seeking just compensation for their injuries.

Alan Milstein